Best Rural Bridging Loan for Your Farm

Rural Bridging Loan Uses:

• Buying Land: Expanding or buying farmland, particularly at auctions or in situations where quick cash flow is necessary to buy land urgently.

• Buying Farms: Buying new farm properties before selling an existing one.

• Refinancing Debt: Consolidating existing loans or covering urgent expenses.

• Agricultural Equipment: Buying essential machinery or vehicles for farming.

Rural bridging loans are not limited to these uses, so are a flexible solution for those in the agricultural sector.

Benefits

1. Quick Access to Funds

One of the biggest benefits of rural bridging loans is the speed. Loans can be approved and settled in as little as 72 hours so you don’t miss out on time critical opportunities.

2. Flexible Repayment Options

Borrowers can choose serviced interest where interest is paid monthly or rolled up interest which is paid at the end of the loan term. This flexibility allows borrowers to match their repayments to their cash flow.

3. Secured Against Existing Assets

Rural bridging loans are secured against assets such as existing land, property, or equipment. This gives lenders confidence and allows borrowers with complex financial situations to get funded.

4. Bad Credit Friendly

Unlike traditional loans, rural bridging loans are more available for individuals and businesses with bad credit. Lenders look at the value of the secured asset and the exit strategy rather than just the credit history.

5. Flexible

Rural Asset Finance

In addition to rural bridging loans there are other finance options available for agricultural businesses:

1. Hire Purchase

This allows you to spread the cost of equipment or vehicles over a set period. Ownership transfers to you once the final payment is made, perfect for long term investments.

2. Contract Hire

This is a fixed term agreement for the use of vehicles or equipment without ownership. Suitable for businesses that need access to resources without committing to full ownership.

3. Asset Refinance

This releases cash tied up in existing assets. By refinancing you can get access to cash quickly which is useful for covering unexpected expenses.

4. Finance Leasing

Leasing gives you access to the latest equipment or vehicles with flexible repayment terms so your business stays competitive.

Each option has its benefits and it’s up to you to decide which one suits your needs and goals.

How it Works

1. Secured Loan

Rural bridging loans are secured against assets such as land, property or equipment. The value of the security determines the loan amount.

2. Loan Amount and Interest

The loan amount is based on the value of the asset and the borrower’s creditworthiness. Interest rates for bridging loans are higher than traditional loans and are usually between 0.5% to 1.5% per month.

3. Repayment Terms

Loans are short term, usually 6-12 months. A clear exit strategy, such as selling an asset or refinancing, is required for repayment.

4. Exit Fees

These are fees charged when the loan is repaid. Proper planning can help reduce these costs.

5. Valuation

A valuation of the secured asset is required to determine its value. This affects the loan to value (LTV) ratio which is usually 75-80%.

Costs and Fees

Rural bridge loans have various costs and fees for borrowers to consider:

• Interest Rates: 0.5% to 1.5% per month depending on the loan amount and risk profile.

• Arrangement Fees: Lenders charge these fees for setting up the loan, 1-2% of the total loan amount.

• Exit Fees: Some lenders charge a fee when the loan is repaid, 1-2% of the loan balance.

• Valuation Fees: The cost of valuing the secured asset, from a few hundred to several thousand pounds depending on the property size.

Knowing these costs will help you work out the total cost of the loan and plan accordingly.

How to Choose a Rural Finance Broker

A good broker will make the process of finding and securing a bridge loan is easier. Here’s what to look for:

• Rural Finance Experience: Choose a broker with experience in agricultural finance and understands the challenges of rural businesses.

• Lender Network: A good broker works with multiple lenders so you have more chance of getting better terms.

• Reputation: Check customer reviews and testimonials to see if the broker has happy clients.

• Regulation: Check if the broker is authorised and regulated by the relevant financial authorities, e.g. FCA in the UK.

Agricultural Finance Solutions

Agricultural businesses face unique challenges, from seasonal cash flow fluctuations to the high cost of land and equipment. Customised rural finance solutions can help. Here are some options:

• Bridge Loans: For property or land purchases, urgent funding or debt refinancing.

• Asset Finance: For buying or leasing farming equipment.

• Mortgages: Long term loans for buying farms or expanding the business.

Working with people who know the agricultural industry means you get solutions designed for you.

Advice for Rural Businesses

Rural finance requires specialist knowledge. Our team has over 100 years of combined experience in the agricultural industry. We know the challenges rural businesses face and provide bespoke advice to help you grow and thrive.

How We Support Rural Businesses:

• Personalised Guidance: We take the time to get to know your business and recommend the right finance solutions.

• Long-term Relationships: We want to build lasting relationships, supporting you as your business grows.

• Industry Knowledge: Our understanding of the agricultural industry means we can anticipate your needs and offer proactive advice.

Case Studies and Testimonials

Our rural finance approach has helped many agricultural businesses. Here are a few examples:

• Land Purchase: We helped a family run farm get a bridging loan to buy more land for expansion so they could increase production.

• Debt Refinancing: A livestock business refinanced their existing debt using a bespoke bridging loan and improved their cash flow and reduced monthly outgoings.

• Equipment Finance: We arranged asset finance for a grain farm so they could upgrade their harvesting equipment.

Our clients like our personal, face-to-face approach and we find the right finance for their needs.

FAQs

1. Can I get a bridging loan with bad credit? Yes, bridging loans are available to people with bad credit if they have sufficient security or assets to offer.

2. How quick can I get a bridging loan? Bridging loans can be approved and funded in as little as 72 hours depending on the lender and the complexity of the application.

3. What are the interest rates for rural bridging loans? 0.5% to 1.5% per month depending on the loan amount, term and risk profile.

4. Why is having the necessary documentation important for securing a rural bridging loan? Having the necessary documentation ready can expedite the process of securing a rural bridging loan. It enables lenders to deliver a decision in principle within 24 hours, facilitating quick and efficient lending decisions.